2024 (3) TMI 1460 - HC - FEMA

Adjudicating authority must provide denied documents and allow fresh explanation after violating natural justice principles

Sameer BS Rao Chief Financial Officer Xiamoni Technology India Private Limited Versus The Adjudicating Authority Special Director (Sr) Directorate Of Enforcement, The Assistant Director Directorate of Enforcement Bangalore The Joint Director Directorate Of Enforcement Bangalore

The Madras HC disposed of appeals under Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000. The appellant was denied four ... Proceedings under FEMA Act - as argued appellant was not supplied with four crucial documents, violating the principles of natural justice - Ld' Single Judge concluded that the principles of natural justice are violated as four documents relied on were not submitted to the appellant - HELD THAT:- In view of the fact that the learned Single Judge has observed that the principles of natural justice are violated in view of the fact that the documents were not supplied to the appellant, though was given an opportunity to inspect and directed to give an opportunity to the appellant to file its explanation in view of the four documents supplied later on, naturally the opinion to be formed would be based on the explanation given by the appellant upon the supply of all the documents. As such, instead of further opinion to be formed by the officer, the adjudicating authority would form a fresh opinion based on the explanation submitted by the appellant upon receipt of the four additional documents. The said opinion shall be uninfluenced by the earlier opinion formed. The earlier opinion would be non-est. WP dismissed. The Madras High Court addressed appeals arising from proceedings under the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000. The appellant was not supplied with four crucial documents despite seeking them, leading to a violation of the principles of natural justice as held by the Single Judge. The Single Judge directed that the appellant be given an opportunity to provide a fresh explanation after receiving the four documents, while allowing the adjudicating authority to form a further opinion.The Court clarified that 'there cannot be two opinions on record' and that the earlier opinion must be set aside. The adjudicating authority is required to form a 'fresh opinion based on the explanation submitted by the appellant upon receipt of the four additional documents,' which 'shall be uninfluenced by the earlier opinion formed' and that the 'earlier opinion would be non-est.' The appeals were disposed of accordingly, with no order as to costs.